Valeo Se · EURONEXT:FR
Valeo — CSFB Automotive Conference 2008
38 slides from Valeo's conference presentation, Oct 2, 2008
Slide 1: CSFB Automotive Conference IAA 2008
CSFB Automotive Conference IAA 2008 Thierry Morin Chairman & CEO Paris- October 2, 2008
Slide 2: Agenda
Agenda 1 Well positioned to benefit from industry trends 2 A resilient company CSFB Automotive Conference- Paris, October 2, 2008 I 2 I
Slide 3: Well positioned to benefit from industry trends
Well positioned to benefit from industry trends
Slide 4: Industry long term trends
Industry long term trends Inescapable industry trends Î Drive to zero emissions Î Drive to zero accidents Will generate growth even with flat automotive markets Valeo heavily investing in these market trends Î Potential to reduce CO2 emissions by 40% Î Key player in active safety CSFB Automotive Con
Slide 5: Valeo Domains support our strategy
Valeo Domains support our strategy Sales €9.6bn* I Electrical Engine mgmt Engine Transmission systems systems cooling Powertrain Efficiency N B D R U A Interior control S N Lighting Wipers T systems systems detection Driving Assistance C systems R H I E A S Climate Interior controls Security Compres
Slide 6: Portfolio aligned with Domain strategy
Portfolio aligned with Domain strategy Disposed worth €1bn in revenues since 12/2006 Î Businesses – Limited technological synergies – Limited value added – Limited market share Î Achieved competitive multiples (above 6 x EBITDA) Bolt on acquisitions Î High technological content Î No financial gearin
Slide 7: Powertrain trends
Powertrain trends
Slide 8: CO2 emissions set to grow dramatically
CO2 emissions set to grow dramatically CO CO22 (ppm) (ppm) in in atmosphere atmosphere 600 500 400 300 200 1000 1200 1400 1600 1800 2000 Year Year Source: Intergovernmental Panel on Climate Change CSFB Automotive Conference- Paris, October 2, 2008 I 8 I
Slide 9: Powertrain Efficiency - CO2 regulation drives the WW market
Powertrain Efficiency - CO2 regulation drives the WW market Europe: 120g CO2/km Japan: USA: by 2012 16.8 km/l 35 MPG 95g CO2/km by 2015 by 2020 Council for transport Policy Senate Bill by 2020 February 2007 June 21 2007 European Commission Equivalent (for gas engine): 2012: 5 l/100km 2015: 6 l/100km
Slide 10: Gas price trend & forecast
Gas price trend & forecast US gas retail price (in US$) Oil Barrel (in US$) 160 8 140 7 Forecast 120 6 100 5 80 4 60 3 40 2 20 1 0 0 2 3 4 5 6 7 8 9 J an-0 J an-0 J an-0 J an-0 J an-0 J an-0 J an-0 J an-0 Source : www.oil-price.net CSFB Automotive Conference- Paris, October 2, 2008 I 10 I
Slide 11: Impact on consumer behavior
Impact on consumer behavior French “bonus malus” Î Sale of vehicles emitting less than 130g/CO2 up 40% Î Sales of vehicles emitting more than 160g/CO2 down 25% Market drop in US Above $180/barrel or more than 2€/liter = Revolution* Î Major shift from C/D segments to A/B segments Î US market signific
Slide 12: CO2 emissions - OEMs face challenging goals
CO2 emissions - OEMs face challenging goals 190 Fuel consumption (g CO2/km) GASOLINE 2004 170 Valeo Solutions Divided by 3 Diesel 2004 - 30% 150 - 40% -20% 130 DIESEL HAS TO CATCH UP ON EMISSIONS 120 BUT THE RACE FOR GREENHOUSE - 20% 2012- GASES REDUCTION WILL 110 2020 BE LED BY GASOLINE 90 >2020 0.
Slide 13: Industry answers
Industry answers Engine downsizing Hybridization and energy recovery Alternative Fuels Electrical Vehicles CSFB Automotive Conference- Paris, October 2, 2008 I 13 I
Slide 14: Valeo Fuel Economy solutions portfolio
Valeo Fuel Economy solutions portfolio Power on Low consumption Demand A/C compressor - 3% UltimateCooling™ -3-5% Thermal Management - 40% Feasible THEMIS™ - 4% Transmission DUAL CLUTCH Automation -4-6% transmission Air Systems Cooled EGR system -5-7% Hybridization MICRO HYBRID -6-15% (from Stop-Sta
Slide 15: Hybridization Roadmap
Hybridization Roadmap -100% Congested -25% urban traffic -25% -15% FULL HYBRID Urban cycle -12% And PLUG-INs MILD -12% HYBRID MVEG cycle -6% MICRO - MILD HYBRID with Ultracapacitors StARS Full Electric Drive MICRO-HYBRID Part Electric Drive Torque Assistance Regenerative Braking Stop & Start Stop-St
Slide 16: Hybrid market vision
Hybrid market vision 2008 – 1.1 M vehicles 2013 – 17 M vehicles µ & µ Mild µ & µ Mild Mild 80% 38% 7% 14 Plug In 2 0.7% 1 Full Mild Plug In & EV Full 12% 7% 0.5% 54% Bottom up approach for 2013 with Stop-Start Booming to comply with 2012 CO2 regulations CSFB Automotive Conference- Paris, October 2,
Slide 17: Driving assistance trends
ow an [—] ° = aa Wr) = ( Driving assistance trends
Slide 18: Towards zero accidents
Towards zero accidents Legislation/repressive measures Infrastructure Driver behavior Technology CSFB Automotive Conference- Paris, October 2, 2008 I 18 I
Slide 19: Safety technology drivers
Safety technology drivers Automation of functions to reduce driver distraction Improve visibility Inform the driver of what he can’t see Intervene to take control of car Pedestrian protection CSFB Automotive Conference- Paris, October 2, 2008 I 19 I
Slide 20: Driving Assistance - Growth drivers
Driving Assistance - Growth drivers REGULATIONS: Æ Daytime running light (mandatory in 2012) in Europe Æ Investigations to mandate Lane View, blind spot and emergency braking in US & Europe SEE BETTER WHERE YOU CAN SEE SEE WHERE YOU CANNOT SEE 100% Fr o 100% (Low speed maneuvering) nt H a loge n 75%
Slide 21: Comfort trends
Comfort trends
Slide 22: Convenience & well being
The NO STRESS Car Personalized comfort Î Air conditioning Î Air quality Î Smart car key Reduce distraction through easy to use interface Î Head up displays Î Virtual environments Secured and automated access Î Automatic opening and closure Convenience & well being CSFB Automotive Conference- Paris,
Slide 23: Valeo innovative solutions gain momentum
Valeo innovative solutions gain momentum ORDER INTAKE/ X OE SALES (excluding VMA & VCS in 2006 & 2007) 1.1x 1.3x 1.3x €8.6bn €9.9bn €10.1bn Others +50% Innovative products 2005 2006 2007 CSFB Automotive Conference- Paris, October 2, 2008 I 23 I
Slide 24: A resilient company
A resilient company
Slide 25: Success factors
Success factors QUALITY COST TECHNOLOGY GLOBALE PRESENCE Technology as differentiating factor CSFB Automotive Conference- Paris, October 2, 2008 I 25 I
Slide 26: Quality levels
Quality levels Customer returns Single digit PPMs sites In parts per million As % of total 185 64% 47% 39% 39% 53 26% 32 15 10 2003 2004 2005 2006 2007 2003 2004 2005 2006 2007 CSFB Automotive Conference- Paris, October 2, 2008 I 26 I
Slide 27: Operational excellence - Industrial footprint
Operational excellence - Industrial footprint 31/03/2001 – 30/06/2008 perimeter changes included 28% of productive workers in LLC 48% of productive workers in LLC +14 +31 -48 -45 170 122 31/03/2001 Closures Disposals Openings Acquis. 30/06/2008 CSFB Automotive Conference- Paris, October 2, 2008 I 27
Slide 28: Business model robustness
Business model robustness OPERATING MARGIN OPERATING MARGIN adjusted for cumulative % of total operating revenues raw material headwinds (2004-2007*) (2003-2007) 6,0% 5.0% +2.5% +15.8% 3.6% 5,0% +4.5% 4,0% Customer Operating contribu- Operating margin tions margin 2003 2007 3,0% -9.0% Product reengi
Slide 29: Rebalanced customer exposure
Rebalanced customer exposure OE SALES (2001- 2007)* Automaker 2001 2007 Asians 5.7 % 14.7 % Big 3 31.7 % 21.8 % German 22.5 % 24.5 % Mercedes & BMW 7.5 % 10.6 % PSA & Renault 28.1 % 26.7 % Fiat 5.0 % 4.4 % * Excluding VMA & VCS in 2001 CSFB Automotive Conference- Paris, October 2, 2008 I 29 I
Slide 30: H1'08 key figures
H1’08 key figures In euro million H1-2008 H1-2007 Change Total operating revenues 4,914 5,006 -1.8% Operating margin 203 177 +14.7% as % of total operating revenues 4.1% 3.5% + 0.6 pt Net income 100 71 +40.8% Return on capital employed 16.7% 13.6% +22.8% Net financial debt 621 799* €(178)m *year-end
Slide 31: Solid balance sheet
Solid balance sheet Debt Maturity Profile 600 Current maturities of long-term debt Short-term debt 500 Other 400 Bond issues Syndicated loans 300 OCEANE 200 100 0 <1 year 2009 2010 2011 2012 2013 and beyond Debt Maturity Profile <1 year 23% 5 years and 1-3 year beyond - 65% 3-5 years - 1% 35% CSFB A
Slide 32: Solid balance sheet in industry context
Solid balance sheet in industry context 250 3,5 3 200 2,5 2 150 1,5 100 1 0,5 50 0 -0,5 0 l na W ia I r o li v ta ar n JC -1 ne le ec eo TR en Le to ag Va ar ur st Au ti n M W Vi Fa on rg C Bo -50 -1,5 Net debt/Equity (LA) Net debt/ebitda CSFB Automotive Conference- Paris, October 2, 2008 I 32
Slide 33: Addressing the H2-2008 challenges
Addressing the H2-2008 challenges Global auto production outlook Aggressive cost structure worsens significantly alignment, supportive aftermarket Price competitiveness Productivity gains, securing turnarounds (VC, VLS, VWS) Customer choice for smaller Strong market positions with car/fuel efficient
Slide 34: Contact Investor Relations
Contact Investor Relations Rémy Dumoulin 43, rue Bayen F-75848 Paris Cedex 17 France Tel.: +33 (0) 1.40.55.29.30 Fax: +33 (0) 1.40.55.20.40 E-mail: remy.dumoulin@valeo.com Web site: www.valeo.com CSFB Automotive Conference- Paris, October 2, 2008 I 34
Slide 35: Back-up
Back-up
Slide 36: Quarterly P&L
Quarterly P&L 2008 2007 2006 (in euro million) 2Q 1Q 4Q 3Q 2Q 1Q 4Q 3Q 2Q 1Q Net Sales 2,407 2,435 2,397 2,214 2,472 2,472 2,341 2,125 2,483 2,487 Other operating revenues 37 35 41 31 35 27 35 28 28 23 Total operating revenues 2,444 2,470 2,438 2,245 2,507 2,499 2,376 2,153 2,511 2,510 Gross m
Slide 37: Share Information
Share Information Share Data Bloomberg Ticker FR FP Reuters Ticker VLOF.PA ISIN Number FR 000130338 Shares outstanding as per 30.09.2008 78,209,617 ADR Data Ratio (ordinary share: ADR) 1:2 Bloomberg Ticker VLEEY US Reuters Ticker VLEEY PK ISIN Number US 9191343048 Type Level 1 Ex
Slide 38: Enabling a better automotive world
a Enabling a better automotive world